Capital budget ‘insufficient’ to achieve 6pc growth target

- POST REPORT, Kathmandu

Jul 14, 2014-

Business bodies have welcomed the “private sector-friendly” budget, but have warned the capital budget allocation would be insufficient to achieve the economic growth target of 6 percent.

Nepal Chambers of Commerce (NCC) hailed the government’s commitment to end the existing energy crisis within the next three years. “The attempt to purchase solar energy electricity produced households is positive,” states an NCC statement.

NCC, however, expressed concern about low capital budget allocation (18.9 percent) against high recurrent budget. “It is insufficient to achieve 6 percent economic growth,” it said.

The private sector also termed positive the government’s announcement to make available agriculture loans to youths at not more than 6 percent interest.

NCC has appreciated the government’s plan to develop urban infrastructure involving the private sectors and focus on tourism development. The budget has announced upgrading Tribhuvan International Airport. NCC said the government’s plan to formulate a new labour law is expected to benefit both workers and entrepreneurs. “The government’s announcement to discourage cartel and syndicate systems in transportation is another positive move,” the NCC statement read.

The budget has talked about adopting stern measures against syndicate imposers, including scrapping their licences. NCC, however, criticised the government for not introducing targeted policies on reducing trade deficit.

In a separate statement, the Hotel Association Nepal (HAN) praised the government’s plan for the development of tourism infrastructure. Besides upgrading Tribhuvan International Airport, the government has also allocated resources for improving airports in Bhairahawa, Pokhara, Biratnagar, Nepalgunj, Dhangadhi, Janakpur, Bhadrapur and Surkhet. It has also prioritised the development of the proposed second international airport in Nijgadh, Bara.

HAN has also appreciated the government’s announcement to promote the East-West high-hill rural tourism. The route has been planned to be promoted as The Great Himalayan Trail. The association also hailed the plan to provide income tax rebate to hotels opened with over Rs 2 billion investment.

HAN, however, criticised the budget for failing to promote small hotels which are vital for tourism promotion.

Published: 15-07-2014 09:15

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